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Kovacevich was a statutory employee because at all relevant times
he served as petitioner’s president and secretary-treasurer,
worked in all significant aspects of petitioner’s business,
performed substantial services for petitioner in his capacity as
an officer, and obtained remuneration for such services from
petitioner as his needs arose.2
III. Section 530 of the Revenue Act of 1978
Section 530 provides relief from employment tax liability,
notwithstanding the actual relationship between the taxpayer and
the individual performing services. Sec. 530(a). The taxpayer,
however, must establish: It did not treat the worker as an
employee, filed all returns for periods after December 31, 1978,
“on a basis consistent with the taxpayer’s treatment of such * *
* [worker] as not being an employee”, and had a reasonable basis
for not treating the worker as an employee. Sec. 530(a)(1) and
(2); Joseph M. Grey Pub. Accountant, P.C. v. Commissioner, supra
at 123.
2 Petitioner contends that the Court’s determination of
whether Kovacevich is an employee or independent contractor is
controlled by Clackamas Gastroenterology Associates, P.C. v.
Wells, 536 U.S. __, 123 S. Ct. 1673 (Apr. 22, 2003). We
disagree. In Clackamas, the Court simply held that in
determining whether four director-shareholder physicians were
employees or employers for purposes of the Americans with
Disabilities Act of 1990, “the common-law element of control is
the principal guidepost”. The Court did not consider whether
these individuals were employees or independent contractors for
FICA and FUTA purposes. For employment tax purposes, Kovacevich
is a statutory employee pursuant to sec. 3121(d)(1), and we need
not resort to the common-law principles considered in Clackamas.
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